The ACfPU successfully co-hosted its evening conference with Cass Business School: When PE and M&A meet Real Estate: Is the UK Market a Safe Haven for Chinese Investment? Industry experts from Coutts &Co., Ernst & Young and Fosun International shared unrivalled insights into the current M&A and Real Estate landscape as well as stories behind recent deals in the news.
The event welcomed an audience group of over 200 people, including Cass students, young professionals, and senior representatives from China Britain Business Council, banks, law firms, professional service firms, investment management firms, small businesses, and Chinese social & investor clubs. In addition, the event has drawn much media attention, notably Xinhua News, Singtao Daily as well as UK Property and Investment Weekly.
Following President Xi’s state visit in Oct 2015, nearly £40 billion trade and investment deals have been signed. The UK and China’s bilateral relationship has entered what has been described as a ‘golden era’. From 2010 to 2015, the total value of real estate mergers and acquisition investment from China into the UK was $4,104 million, representing 30% of the total investment into the UK.
Cecilia Wu from Coutts & Co, lead organiser of this event, chaired the programme of the evening.
Professor Moeller, the Director from Cass M&A Research Centre as well as a regular commentator on BBC and CNBC, kicked off the evening outlining the current M&A global outlook. He pointed out that M&A came back with a vengeance in the last year with a record of $5 trillion deal value, equalling the half of the annual GDP of China.
Stephen Rees, Head of Real Estate Advisory from Coutts, started with an overview of the UK Real Estate Market, looking at fundamentals and trend in 2016. He commented that the supply from capital and occupier markets has been limited. However, demand, on the other hand, has been increasing in most markets. In addition, interest rates are likely to remain low, and if they do increase, will increase slowly and gradually. Looking at 2016 trends, the market is broadly optimistic but there are concerns about the tax changes, together with further bureaucratic constraints on property lending from the Mortgage Credit Directive, as well as political factors from the EU referendum and London Mayoral Elections. One of the new trends in 2016 includes increasing demand from operational real estate, such as student accommodation, health care and hospitality.
Nancy Zhang, an M&A advisor, from Real Estate Corporate Finance Team of Ernst & Young, discussed China outbound investment from a UK Market perspective, looking at some of Ernst & Young’s recent purchases and buyers’ concerns when doing deals in the UK. She addressed how to deal with buyers’ concerns, such as optimal strategy/pricing, local transaction framework, timescales, due diligence as well as adequate in–house resources. She also discussed some of the key drivers of investment including higher yield, operational uplift, and the growing interests in Health, Leisure, and Education.
Arthur Chen, Senior Investment Director at Fosun Group, gave the last presentation from a Chinese investor’s perspective. His in-depth analysis of Fosun’s investing strategy and business model intrigued many in the audience. With examples of their recent acquisitions, including the Joint Venture with Resolution Property Investment Management firm July last year, Arthur offered insights into how to identify and seize the right investment opportunities given the ever changing economic climate. He also revealed the footpath of Fosun’s business development, the secrets of their operating model.
A Q&A session took place right after the presentation where guests asked about the impact of Chinese government regulations and central policy. Cecilia also sought advice on young professionals’ career development. This was followed by ACfPU committee member Nicole Wang’s closure of the conference of the evening. Guests then enjoyed drinks and canapés in the networking session after.
Notes to the editor:
Cass Business School is a part of City University London, which will soon be part of the University of London. Situated in the heart of the City, Cass Business School delivers innovative, relevant and forward-looking education, consultancy and research. Cass’s education programs have a global reputation for excellence. Its Financial Times Full Time Global MBA 2016 is ranked 6th in the UK and 37th in the world. http://www.cass.city.ac.uk/
Coutts & Co, a renowned Private Bank and Wealth Manager, providing modern private banking, wealth management and specialist advice services to high net worth and ultra high net worth individuals. Coutts was named the Best Private Bank in the UK –PWM/ The Banker Global Private Banking Awards 2015. https://www.coutts.com/
Ernst & Young is a multinational professional services firm headquartered in London, with offices across 150 countries. Its Greater China Business Service has 180 Mandarin speakers in the UK & Ireland. The main services that EY provides as an M&A advisors are M&A, Tax and Due diligence. http://www.ey.com/UK/
Fosun International is one of the biggest private conglomerates in China. As of today, Fosun established a development model powered by four growth engines comprising insurance, industrial operations, investments and assets managements. Through implementation of its philosophy of value investment, Fosun is making strides towards its vision of becoming ‘a premium insurance-oriented investment group with a focus on China’s growth momentum’. http://www.fosun.com/en